university of southern california Operations And Supply Chain Management Assignment Help - Job-costing spoilage and scrap.

Question - Job-costing spoilage and scrap. MetalWorks, Inc., manufactures various metal parts in batches as
ordered by customers, and accounts for them using job costing. Job 2346-8, a large job for customer
X, incurred $240,000 of direct materials costs and $620,000 of direct labor costs. MetalW orks applies
overhead at a rate of 150% of direct labor cost. MetalWorks quoted customer X a fixed price for the
job of $2,000,000.
The job consisted of 90,000 good units and 10,000 spoiled units with no rework or disposal value. The
job also created 200 pounds of scrap which can be sold for $3 per pound.
1. Calculate the gross margin MetalW orks will earn for this job, assuming the scrap sale is treated as
material, and
a. all spoilage is considered ...Read More abnormal.
b. normal spoilage is 8% of good units.
c. normal spoilage is 12% of good units.
2. How would your answer to number 1 differ if the scrap sale is treated as immaterial? ...Read Less

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